Scappoose company, awarded for aviation work, looking to enter new markets

by: MARK MILLER - Mike Dennis, founder and chief executive officer of Oregon Aero in Scappoose, presses his hand down on a partially finished airplane seat cushion in one of his company's fabrication buildings to demonstrate its unique physical properties. Oregon Aero's stock in trade for more than 20 years has been in designing equipment like seats and headwear to increase pilot comfort, but the company has recently been branching out into new fields.Oregon Aero has designed and produced headwear, seats and other equipment for military and civilian aviation for more than two decades.

But the company, which was founded in 1989 and is headquartered at the Scappoose Industrial Airpark north of town, has had to weather the effects of the Great Recession and the across-the-board federal budget cuts known collectively as sequestration — and while it is still flying, it has spread its wings out further to get whatever lift it can.

The Scappoose-based company has diversified its outreach and its portfolio, according to Mike Dennis, the company’s founder and CEO.

“We’ve been busy reinventing ourselves to see if there’s other places,” says Dennis, standing outside Oregon Aero’s newest building at the airport. “This is where the gaming market, the medical market [come in]. ... There’s a lot of opportunity in the medical market.”

To hear Dennis tell it, breaking into new markets has not always been easy — he seems especially frustrated by the healthcare industry, which he says has been reluctant to adopt a revolutionary new mattress overlay he claims can completely eradicate painful and sometimes lethal bedsores often suffered by long-term patients — but the company has found that many of the concepts and principles behind its aerospace products work just as well for other uses.

“What we’ve done is we’ve figured out how to mechanically stop the problems that are causing issues,” Dennis says. “A lot of problems are actually bio-mechanical.”

Sky is the limit

Dennis and Adam Carroll, Oregon Aero’s sales and marketing director, enthusiastically describe the company’s recent foray into the online gaming community.

After company officials got wind of complaints from many gamers who wear headsets as part of their play about discomfort and headaches, Oregon Aero began looking into how to adapt its aviation headsets for a different market.

“We had to kind of look into this. It’s a little different than military markets. It’s a little different than general aviation. It’s a completely different market,” says Dennis. “And so we rose to the occasion.”

Carroll says he set up a booth at the PDXLAN 23 gaming event in Portland this February. The Oregon Aero gaming headsets sold “like hotcakes,” in his words; the company is already listed on the PDXLAN website as among the companies that will have a presence at its next gaming party in July.

“We definitely got quite a bit of response,” Carroll recalls.

Dennis speaks with even more pride about Oregon Aero’s work in developing new materials and devices for use in the world of medicine, including shoe liners that alleviate pressure from standing and the aforementioned mattress overlays, as well as seat cushions, that inhibit bedsores.

“We have a series of new developments that are going to change medicine,” he says.

But Oregon Aero has struggled to find a niche in the medical market. Dennis says hospitals have shown little interest in its creations, although the Oregon Department of Veterans Affairs is a growing customer.

“They’ve had our products — the first test set they had for two years, almost to the day, and they ... quadrupled their order,” Carroll says, referring to the mattress overlays. “They’re very much early adopters.”

The mattress overlays, Dennis says, are “marvelously comfortable, and your bedsores disappear.”

Dennis says the automobile industry is also an area of opportunity into which Oregon Aero has been attempting to move.

“Cars are kind of an up-and-coming thing,” says Dennis. He describes a potentially lucrative business in after-market upgrades to car seats — replacing the factory-made cushions with more ergonomic, lightweight cushions — and compares them with Mercedes-AMG, which started out as an independent enterprise offering a line of unofficial upgrades for Mercedes-Benz car models, along with shiny logo tags on the back of each car, and eventually became so popular that it was acquired by the car company.

“We’re looking at that as a model and going, ‘Let’s do a trunk-lid logo, so that everybody knows that you have something special inside your car,’” Dennis says.

Grounded in defense

Even as Oregon Aero explores new markets, its defense contracts remain an integral part of the business.

Last year, after Congress failed to produce a budget agreement, a round of cuts called sequestration went into effect; when the political standoff worsened, the federal government effectively shut down for the first half of October until a deal was reached.

“Sequestration caused a real problem last year,” Dennis admits. “It didn’t save us any money as taxpayers, because all it did was said, ‘We can’t buy stuff.’ It didn’t change the need. And so when sequestration finally went away, then the need went nuts. And it just delayed the purchase [of military equipment].”

The company’s financial trouble put it in arrears with its landlord, the Port of St. Helens.

Touring his production facility in Scappoose, Dennis does not seem especially interested in talking about Oregon Aero’s late payments.

“That was thanks to sequestration. We’re coming out of that hole,” Dennis says. Asked how much the company owed, he grimaces: “I don’t know. It’s not as bad as it sounds. It’s just an unfortunate colliding of events.”

Craig Allison, manager of Scappoose Industrial Airpark, is also reluctant to talk about the state of Oregon Aero’s debt to the port. But he and Dennis both tout the strength of the relationship between the port and Oregon Aero, which is one of the largest employers operating on port property in Columbia County.

“It’s been a very solid [relationship] for quite a while,” Allison says.

The company recently concluded the first phase of a refinance through the U.S. Department of Agriculture, with the port’s blessing. Allison predicts it will be “quite beneficial” and “a great thing for the company,” noting that the agreement will reduce Oregon Aero’s interest payments and replenish its capacity to take on temporary debt.

“That’s another program that’s available to you if you live in Scappoose, but not Portland. It’s a rural economic incentive program,” says Dennis, adding, “We’re the poster child for the USDA program. They love us, because it actually works.”

He continues, “You know, everybody’s weathering an economic storm right now that’s pretty fierce. And all this talk about recovery? That’s nonsense. There’s no recovery happening. It’s a hold-your-own and find-new-things-to-do time. Your old business is gone. You have to invent something new now.”

Bright horizons

Despite the downturn, Oregon Aero remains the second-largest employer in Scappoose, behind Fred Meyer, according to Dennis and Carroll. Dennis says proudly that the company has not laid off any of its 63 employees for economic reasons during the recession.

The company recently consolidated a machine shop it operated in St. Helens into its Scappoose location — a “pretty rational consolidation,” Allison comments — and Dennis says he would like to move another manufacturing facility it has in Salem up to Scappoose in the near future.

Dennis himself commutes to work by air, flying between Scappoose and his home in Battle Ground, Wash., in his personal aircraft.

He says he plans to keep Oregon Aero in Scappoose, and speaks optimistically of the region’s potential for industrial development.

“The Scappoose-St. Helens area, they don’t know it yet, but this is one of the last opportunities for industrial growth in the [Portland] metro area,” Dennis says; mixed-use developments and apartment housing have flourished on former industrial land in cities like Hillsboro and Portland, he explains. “We’re starting to eat up the available spaces for this kind of stuff.”

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